The Problem Statement India

Table of Content

Most of the farmer in our country and the world are producing Cotton and supplying to the Cotton Gingery. As the production increases the conventional methods of Gingery are replaced by automatic Gingery. This research paper discusses entrepreneurship development for cotton Ginning (in India) and conventional gingery using pre-cleaner for removing the contaminants like trash, stem, leaves, immature locks etc. Which is not being used by Sinners. Present scenario reveals that most of the handling operations are replaced by mechanized conveying, which may probably clean the cotton in various stages of remonstration of cotton.

The drawbacks in system are that the crop producer or farmer is not fetching the reasonable price from the sinners. If farmer installed pre cleaner at storage place either in village or at farm can fetch better price. In this paper we will discusses the details of recent trend and economic feasibility of cotton ginning (India) in details. Index 1. Introduction a. Background of the Study . B. Importance of the Study Problem Statement . Aims and Objective Research Questions Literature Review a. Theoretical underpinning .

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In year 2002/03, Indian’s production was a mere 13. 6 million bales, which in a short span of five years doubled to 31. 5 million bales. Transgenic BAT cotton seed has taken the agriculture sector (related to cotton) by storm, which may be certainly not be pleasing to the critics of BAT cotton. In 2008/09 Indian’s production was expected to be 32. 2 million bales. This optimism stems for higher coverage, over 80 percent (versus percent last year), under pest protected transgenic BAT hybrids. In 2007/08, exports of cotton touched an all time high of 8. 5 million bales as per CAB.

Cotton exports multiplied from just million bales in 2004/05 to 4. 7 million bales in 2005/06 and on to 5. Million bales in 2006/07. India has evolved from being a net importer of cotton not so long ago to being a net exporter. All major buyers from countries like China, Pakistan, Bangladesh, Turkey, and Thailand have shown keen interest in contracting Indian cotton recently in the wake of restricted global supply. But since most of the cotton has been exported to China and Pakistan, it will not be in the interest of our economy to supply our valuable raw materials to our most prominent competitors.

Thus, per industry sources, exports are likely to dwindle to coca bales in 2008/09. Despite massive improvement in productivity as well as production, the prices of cotton in domestic market have gone up by 40 percent, which is again a record. In 2007/08 India had the ending stock of 4. 3 million bales, the lowest ever carryover stocks in recent times an 18 percent stock-to-use ratio. Now the industry reports an ending stock of less than 3 million bales, or just a percent of stock-to-use ratio. Global stock-to-use ratio for 2007/08 was 44 percent, and some of Indian’s key competitors such as China,

Pakistan and Turkey have stock-to-use ratios in the 30 percentiles. Ideally, stock- to-use ratio should be percent, and this extraordinary low carry over has led to the soaring increase of domestic cotton prices (Killer, 2006, Pl 155). Last year a good chunk of cotton stock was available with international merchants as well as speculators who took full advantage of these conditions and dictated their terms. The above led to losses to most textile companies and, as a result, most of the mills have recently cut down their production by as much as 30 to 35 percent.

An unprecedented hike in Minimum Support Price (MSP) in 2008/09 is proving to be a huge challenge for the Indian Textile Industry. In a shocking move, Government of India increased the MSP for cotton in the current year by as much as 47 percent. Given that Indian Cotton prices are already 20 percent higher than international prices, raising the MSP increased the raw material cost for textile players eating further into their margins. The net result is that for the time being, Indian products are not only become expensive but also non competitive (Murphy 2004, pop).

To be fair, selling was very smooth for Indian Textiles until id-2007. An industry, which was creating $37 billion in 2004/05, has grown to $50 billion. In the last two to three years, massive expansion took place and everyone was bullish about this sector. But an unprecedented surge in rupees (INNER) in the later part of 2007 put the brakes on advancing juggernaut. After an impressive 31 percent jump to $8. 6 billion in 2006 fiscal year, the rate of growth slowed to percent and percent in subsequent two years.

The country’s textile and clothing exports are all set up to fall short of the target for second year in a row. The gap between actual exports and targeted exports may be as high as 21 percent, meaning that target set by the government to increase exports to $55 million by 2012 may remain a distant dream. Of late, the US economy has been struggling through a slowdown and a credit squeeze that has thus reduced its appetite for imports. Small countries such as Bangladesh and Vietnam are posing a threat, especially for basic products, as Indian product is getting expensive.

Many Indian companies are now contemplating to move their manufacturing bases out of India to such countries due to cost advantage. Given that the textile sector generates a substantial amount of employment, and 45 million cotton growers depend on its fortunes, the Government of India should immediately intervene to stop the impending mess. The time to act is now. The sooner the problem of this sector is addressed, the better it will be for a country of the size of India. Importance of the study India has approximately 4,000 cotton ginning and pressing units but majority of them are using obsolete technology and are not capable to hold worldwide quality standards. Recently, technological advancement of this industry has en getting notice for about a decade but development made so far has at best been delayed. In the early ass, when exports of raw cotton were feasible, a small number of modern ginning units were launched because of liberal allotment of export allocation to such units.

On the other hand, quality get worse in the second half of the nineties and, in the last 2-3 years, it has become hard for the trade to hit export deals for the reason of quality issues, despite of limits on exports having been separated completely. Problem Statement India is the third largest producer of Cotton in the world and the expansion after cost liberalizing period is quite impressive. However, the dark side of this spurt in production is its low productivity compared to global standards, high costs and dwindling returns.  Indian cotton also suffers from lower staple length and contamination. Small farmer dominated agriculture is not supported well by public irrigation, access to institutional credit and extension. The presence of domestic and multinational seed company have only made life difficult for the peasants in making appropriate decisions in the absence of effective extension. The fertilizer and pesticide use ran muck with dealer-led informal information guiding the farmers.

The reduction of access to formal credit in the post-liberalizing period further hit the farmers with high interest rates of money lenders (Sheets, 2008. ) Cotton crop in India, by and large, due to the aforesaid reasons suffers poor value in the market and is thus losing viability. There is need to keep the relative price stable in the long run as cotton acreage is highly responsible to relative price, inter alai. On the other hand, improving productivity is crucial for the farmers to face the inevitable decline of terms of trade.

The three most important factors to yield and quality are irrigation, technology and extension. The minimum support prices, procurement and regulated imports from the crucial pillars of policy support from the side of the government. The introduction of new technology in terms of BAT hybrids has enhanced productivity in recent times. Besides these measures, there are several other possibilities of innovations generating internal economies by reorganizing the supply chain. My family business is into Textile Industry thus gives me motivation to work into the main area of textile industry i. Cotton. Also one of my aims in future is to have my own Cotton Ginning and Pressing unit gives me a wide scope for researching into this area. Hence, the main aim and objective of this research is to explore the role of entrepreneurship development for cotton ginning (in India). Research Question 1 . What is the potential Impact of Cotton ginning (India) upon Entrepreneurship Development? 2. Why and to what extent did small-scale and medium-scale entrepreneurs use of Cotton ginning in 1-3 growing seasons cause a negative or Positive impact on their abilities to increase their incomes in India?

Theoretical underpinning Cotton production has significantly increased in the last two decades. In spite of an impressive growth, Indian’s cotton farming is considerably stressed out in terms of returns. There is an urgent need to improve the quality and productivity on the one hand, and reduce cost of production on the other. Cotton supply chain, from raw cotton to yarn production, is presently organized through discrete markets, coordinated by imperfect market mechanisms there is little means through which the industry can reach out to the farmers in the present structure.

Cotton farming is in no enviable position, where constraints on information, extension, marketing, credit, and environment exist. Indian cotton suffers from lower staple length and contamination. Vertical integration perhaps addresses several of these questions effectively. Integration of farm production at the upstream with the various service providers and to spinning mills in the downstream can play crucial role in raising the productivity and quality of cotton. While we believe that it can benefit agriculture as well as industry, the objective of this paper is to show the potential benefits to the rammers.

Vertical integration is generally considered to be an effective mechanism of integrating input markets with downstream processes of production which can help in stabilizing output, raising quality and reducing transaction costs. Generally, vertical integration and vertical coordination strategies are more popular in industry, than agriculture, except in case of the traditional commercial crops such as sugarcane, tobacco, tea, coffee and rubber. Vertical integration of markets is rare, so organization of production is distributed among multitudes of farmers and through layers of middlemen. The information asymmetry and agency problems tend to take away the surplus from producers. Vertical integration, as a strategy of integrating activities through contractual means to augment quality and reduce uncertainty, is a defining rule of success in most of the industrial world. In agriculture too, vertical integration can offer possibilities of creating internal economies like industry, though there is a need to search for a suitable model for Indian conditions.

There are several micro-level experiments which include contract farming being carried out in different parts of the country. Some of them are quite interesting, as they show the potential for repeatability and scalability. Cotton Cultivation in India Cotton production has witnessed an impressive growth, particularly in the last two decades. Production, which remained more or less stagnant for four decades, started showing tremendous buoyancy from the sass. It increased from 30. 62 lake bales in 1950-51 to 78. 60 lake bales in 1980-81. Thereafter, it increased to 117 lake bales in 1990-91, 140 lake bales in 2000-01 , and 258 lake bales in 2007-08. The growth in production was enabled by both area as well as yield.

The growth in yield, particularly visible since 2001-02, incidentally coincides with the introduction of Bat hybrid seed. The area under cotton increased from 78. 24 million ha in 1980-81 to 94. 39 million ha in 2007-08, whereas the yield increased from 1 70 keg/ha to 567 keg/ha during the same period. These growth figures can be extremely misleading if at all to infer about the returns to the farmers, as evidence suggests that there was immense growth. Though the yield increased in the recent times, it varies vastly between states and there is a huge gap between unrestricted and irrigated areas.

Output continues to show weather-induced fluctuations in the average yields. Still 65% of cotton area in the country is not irrigated and this share has remained relatively constant since the sass. The environmental crisis of ground water depletion and poor pest control management continue to be the major issues in cotton cultivation in several states (Sanskrit and Punish, 1994. Indian’s cotton production is dominated by medium and long staple cotton, whereas weighed markets demand extra-long staple cotton. There is a need to engineer a shift to extra- Eng staple production.

Moreover, industry complains about contamination as a serious issue and a good deal of the problem lies at farm management level. Productivity Trends A major problem of cotton production in India is low productivity, and the primary reason being that more than 66% of the area under cotton is rain-fed, with a lower yield as compared to the irrigated tracks (Manikin and Bass, 1992). Among the states, Gujarat has the highest productivity of 655 keg/ha, followed by Punjab in the second place with a yield of 616 keg/ha, and Tamil Undue in the third position, with a yield of 61 5 keg/ha.

Though, Maharajah’s has the largest area under cotton, in terms of productivity it is at fourth place, as most of its crop area falls under the rain-fed region. On the other hand, Punjabi area and production share at all-India level are 6. 5% and 8. 65% respectively, while in terms of productivity, Punjab stands at second place, as most of its area is under irrigation. Besides introducing the high-yielding seeds and spreading irrigation that are crucial in raising the productivity, provision of extension is an equally important variable for successful adaptation of the technology.

There is need to shift from informal sources of extension regarding selection of seed, manure and pesticide application to more professional agency that is missing in most parts of the cotton cultivation. Cost of Cultivation According to the reports of the Commission on Agricultural Costs and Prices (CAP), the cost of cotton production significantly increased during the years 1988-89 and 2003-04, while the prices remained stagnant. The cost of production, on the other hand, continued to increase, squeezing the returns; especially in states like Andorra Pradesh, it increased considerably during 1999 to 2004. Cotton production, besides its specific relation to input market (seed, manure, pesticide, etc. ), credit market, and labor market, is also linked to downstream markets such as lint, yarn and cloth markets in the supply chain. The linkages among all these markets are mediated through layers of agents. The imperfect markets caused by information failure often impose quasi-rents on farmers.

Technological solution and scale economies may not be available due to institutional constraints. What are the alternative mechanisms that can overcome the problems of imperfect markets which are class neutral? Institutional economics provides insights into understanding moral hazards, adverse selection and agency problems in transaction costs. Transaction costs problem adversely affects agrarian markets, and the absence of social capital increases the vulnerability of the producers.

Vertical integration of downstream users with upstream producers, under the presence of transaction costs, improves coordination, reduces uncertainty, improves quality, overcomes adverse selection problem and creates cooperative earplugs between producer and the ultimate buyer. Contract farming, vertical coordination and supply chain management are variants of vertical integration strategies in different degrees under varied circumstances. Given the small peasant-dominated agrarian structure, what is the appropriate organizational model is an important question that needs some thinking.

Farmers’ cooperative model is a relevant one in this context for vertical integration. Given the conceptual superiority of vertical integration as a better form of organizing production, this paper seeks evidence for the putative benefits of it, particularly o the farmers. Ginning Process Most of the cotton grown in India is hand-picked and therefore should be in a condition of highest cleanliness. Unfortunately, this advantage of hand- picked cotton is lost due to rough and atrocious picking by untrained female pickers.

Along with seed cotton the pickers remove dried leaves, shale, hulls, burrs, grass, pieces of plant stalk, bark, straw etc. Seed cotton along with these impurities is collected in soiled, dirty and worn out polypropylene or Jute bags provided by the farmers to the pickers. During this manual operation, certain conditions are favorable to the inclusion of foreign contaminates, such as UP fibers, jute fibers, wool fibers from clothing of pickers, pieces of broken combs, hairpins, human hair, etc. Therefore, our seed cotton gathers considerable percentage of non-lint matter and by the time the UP or Jute bag given by the growers is filled, our cotton has already been contaminated. Unsatisfactory storage The farmers store the bags of seed cotton in godsons in hot and humid environment. Under warm and damp conditions, tiny fungi are formed and seed tone is affected by mildew, which leads to the development of yellow stains on cotton.

The transport of seed cotton from farm godsons to ginning factories in dirty, dilapidated trucks not covered properly by tarpaulins further damages cotton quality. Sub standard ginning Most of the ginning factories in India operate old and obsolete machines. The seed cotton drying, cleaning and lint cleaning machines are either not installed or not operated properly. The removal of leaf hulls and burrs by extraction machinery is carried out in a small number of factories. The dull, poorly set gin aching saws crush seed coats into smaller fragments which are carried forward with the ginned lint. Abnormally, high number of neaps is also created and in some ginning factories moisture is added to the poorly cleaned ginned lint by means of spray nozzles installed in the delivery duct, when transporting lint to the bale press. Some unscrupulous sinners indulge in the malpractice of adding mixture of low and high grade lint in to the same bale.

The cumulative effect of the sub-standard ginning practices results in the production of poorly ginned contaminated cottons with the deficiencies and consequences. Deficiencies and consequences The percentage of non-lint content in the bales of Indian cottons is generally 7%, which is much higher than cotton bales produced by other countries. For example non-lint content of American cottons is about 4. 0%, CASE cottons about 4. 5% and Egyptian cottons is about 3. 0%. On account of high percentage of non-lint content, the yield of yarn from Indian cotton bales is generally about 82%, and therefore, the material cost per pound of yarn rises proportionally.

Furthermore, due to rough and atrocious picking, Indian cotton bales are hardhearted by high level of foreign fiber contaminations. As mentioned above, the contamination content may be as high as 20 grams in a 170 GM bale as compared to about 2 grams present in the case of American, CASE, Egyptian and custom ginned cottons. On the basis of survey conducted by IT MFC in 1999, Indian cottons are classified under the most contaminated description. According to Keith Stuart Smith, the problems of poor quality ginning of Indian cottons are self inflicted wounds.

Indian cotton bales also exhibit large scale variations in fiber properties. Cotton Ginning Technology Condenser Conveyor Belt Systems: The moving conveyor belt is well illuminated by a row of overhead lights to facilitate removal of contaminations by female workers. The auto bale pluckier deliver cotton on the conveyor belt through condensers. The male workers collect sorted cotton and spread over a marked area in the blow room in a sandwich manner and also level the heap. This method is used for producing consistent quality weaving yarns.

Illuminated Perspex Top Tables: The number of tables used is usually half the number of bales handled per shift. Two female workers are posted n each table to sort out foreign contaminations from one bale each. The heap of homogeneous cotton mixing is prepared by spreading the sorted cotton over a marked area in the bloodworm in the same manner as reported above. This method is used for manufacture of hosiery yearns. Foreign Part Separators: In addition to the use of human foreign fiber detectors as explained above, the Spinning Mills also use foreign fiber removal equipment.

The foreign part separators in blossoms in conjunction with the use of appropriate models of automatic electronic yarn clears at the winding shines in order to produce ‘foreign fiber free yarn’ for the production of value- added products is used in mills to produce foreign fiber free yarns. In India, the cotton is normally handpicked. The seed cotton contains some amount of immature bolls, sticks, bracts, and other vegetable matter. The non-lint material can consist of bark, stick, leaf, pepper trash, grass, hulls, seed coat fragments, and motes left behind in the lint.

As the name suggests, bark is the outer covering of sticks and is rather stringy in appearance and not easy to separate from the fibrous lint material. Pepper trash refers to mall broken or crushed pieces of leaf; hulls are the outer coverings of the cotton boll. Immature cottonseeds are referred to as motes. Even when cotton is harvested carefully under ideal field conditions, pieces of leaf and other trash are picked along with the seed cotton. Once cotton is passed through the requisite number of seed cotton cleaning and extraction machinery, the gin stand separates the fiber from the seeds, and the lint is then cleaned before being baled. In spite of advances in cleaning and ginning equipment, trash objects are left in the ginned cotton. Present Mode of Gingery The cotton industry is a multi-billion dollar enterprise worldwide.

The revenues generated, by the various sectors of the cotton industry in the developed country exceeds 120 billion dollars annually. With liberalizing of trade and increasing competition from overseas markets, the cotton industry is keeping abreast with technological advances to produce quality cotton and stay competitive in the free market system. With increasing demand for quality products in the consumer market, the cotton industry is trying to modernize the ginning process. In order to achieve such a goal, industry is exploring new cosmologies to further enhance the productivity of modern gins and to produce quality cotton. The sceneries are many in numbers, but their efficiency is poor.

Dispersed over 9 cotton-growing states in the country, there are over 3000 Ginning units, of which over 2000 perform only ginning where as about 700 composite units perform both ginning as well as pressing. Barring saw ginning units, numbering over 700, installed in northern states and scores of modern roller ginning units in other cotton growing states, the ginning industry in the country can be said to be still backward. Present Mode of Production Activity The analysis of existing gingery is carried out through video film, prepared with objective to know existing method of processing of cotton at gingery.

A flow diagram and flow process chart is prepared for the analysis also postural analysis and cycle time for each operation is recorded. The detail analysis is discussed as under. The machinery used in a typical ginning industry having Ginning and Pressing units in Maharajah’s are: Raw Cotton Pneumatic Conveying System. Pre Cleaner. Ginning machines. Belt Conveyor system. Lint Cleaner. Press machine. Seed Conveying System. Raw Cotton Pneumatic Conveying System. Without changing/Disturbing fiber attributes we convey raw cotton from one place to another pneumatically.

For Raw cotton conveying there are different systems such as, conveying of R. C. From heap to pre-cleaner or up to Gin House & Droppings is done automatically with the help of pneumatically operate dropper boxes the dropper box is again an indigenous design & having no wiping roll as. Fig 1: Pneumatic Conveying System This system can also be called the suction command system which will take away he pain of the gainer to find very dependable persons for feeding the raw cotton to the pre cleaner evenly as required from the heaps of the raw cotton.

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